IBM beats Q1 earnings targets on double-digit cloud growth

IBM reported better-than-expected first quarter earnings Monday as the tech giant's cloud revenue saw double-digit year-over-year gains.

IBM said quarterly revenue from its strategic businesses including cloud and analytics increased 14 percent year-over-year and now represent 37 percent of the company's revenue. IBM's cloud revenue climbed 36 percent to $10.8 billion over the last 12 months.

The company reported first quarter net income of $2.01 billion, or $2.09 a share. Non-GAAP earnings were $2.35 a share on revenue of $18.7 billion.

Wall Street was expecting IBM to report first quarter non-GAAP earnings of $2.09 a share on revenue of $18.28 billion.

As for the outlook, IBM expects non-GAAP earnings for the year of "at least" $13.50 a share. Wall Street is looking for $13.54 a share. IBM expects net income for the year between $11 billion to $12 billion.

"We are pleased with the progress we have made helping our clients apply new cognitive solutions and hybrid cloud platforms," Ginni Rometty, chairman and CEO of IBM, said in a statement.

As for the rest of IBM's numbers, Big Blue's infrastructure services and cloud platforms saw revenues of $8.4 billion, down 1.5 percent. Adjusting for currency fluctuations brings the loss up to a gain of 1.9 percent. Sales from cognitive solutions, including software, were down 1.7 percent to $4 billion.

Systems revenues, including hardware and operating systems software, totaled $1.7 billion, down 21.8 percent.